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The construction industry has always been competitive, and today’s business environment is no different. Contractors everywhere are exploring ways to reduce expenses and boost profits. There are several ways to accomplish that objective. Here are seven ideas a business owner can use to minimize their expenses.

Evaluate Your Use of All Tools and Equipment

Every piece of equipment and all tools have finite lifespans. That includes trucks, all machinery, hand tools, and other equipment used on a construction site. Formwork, for example, is a standard requirement, but many construction companies fail to consider whether the type of formwork purchased will be reusable for future projects. Think about the initial cost of equipment and whether that cost must be absorbed by one job or can be spread out over several projects. If equipment is underutilized, consider disposing of that item and renting rather than owning it in the future.

Focus on Creating Accurate Estimates

In the rush to complete a bid, it’s all too easy to plug in figures that may not be accurate. Take the time to evaluate all labor carefully, as that is one area where it’s especially easy to underbid. However, it’s also important to look at all overhead costs that don’t stop even if weather or equipment issues force the job to shut down.

Form Strong Alliances With Suppliers

When you need materials or services quickly, having an established relationship with a network of quality suppliers is always crucial. Rather than pitting one supplier against another, focus on finding a few suppliers that always deliver. In many cases, it’s worth paying a little more if the supplier delivers their goods or services on time. Minor savings are quickly eaten up when a project grinds to a halt because supplies or equipment haven’t arrived.

Opt for New Technology

Companies today are quickly adopting time-saving strategies that make use of technology. Drones and mobile communication devices are at the top of that list, but even updating items like hand tools often reduces the time required to complete a job. Yes, obtaining some of that equipment can be expensive, but the ROI is generally high.

Cross-Train Employees

While construction workers tend to specialize, contractors are finding it pays to cross-train employees so they’re qualified to play more than one role in completing a project. Again, this may require an upfront investment, but the long-term benefits are worth the time and effort.

Monitor the Budget

Spending can get out of hand quickly on any job site. Contractors must monitor all labor and material costs constantly to avoid budget issues. It’s also important to avoid expenses like overtime whenever possible, as those costs quickly spiral out of control. Take advantage of modern technology and software to stay on top of expenses.

Explore Using Lean Construction Concepts

This is an overarching process that often includes some of the other items here, but the importance of identifying value, creating a precise plan of action, and being focused on achieving quality outcomes will always benefit a construction company. In this case, it may pay to hire an expert or take the time to research practices that contribute to lean construction outcomes.

Know Where to Spend Money

Remember that no construction company can exist without employees. Take the time to learn what’s important to those employees, and explore strategies that enhance employee satisfaction. Constant turnover hinders efficiency, and providing adequate compensation and benefits can reduce that turnover. Obviously, the company budget must balance, but investing in quality employees that stick around generally pays off.

Start Saving Money Today

Some of these strategies can be used now. Other ideas may take a little time to plan and implement, but the important thing is to get a solid handle on job costs and plan now for increased efficiency tomorrow.